ALLIANZ TECHNOLOGY TRUST: UK tech stock guru determined to help investors avoid rollercoaster ride
Technology stocks may not be universally loved and are prone to wild swings in market sentiment, but they remain one of the most interesting investment themes.
That is the view of Mike Seidenberg, manager of the £1.4bn investment fund Allianz Technology, which manages the fund from San Francisco, the world’s technology epicentre.
While high market expectations mean that tech stock values can plummet if earnings disappoint — as recently happened to Tesla, Microsoft and Alphabet — Seidenberg says it’s critical for investors to ignore the noise and think long term.
“As a technology fund manager, there’s never a dull moment,” he says, with Friday’s turmoil a case in point. “But my job is to play the long game. I want to find companies that matter over several years, not just in the big corporate world.”
The portfolio is heavily invested in six of the “magnificent seven” tech stocks: Alphabet, Amazon, Apple, Meta, Microsoft and Nvidia. The exception is Tesla, which has failed to impress the market, with recent figures indicating modest growth.
But as Seidenberg says, the trust isn’t just about big tech. The fund includes about 40 other companies, most of which are listed in the U.S. and many of which have headquarters near where Seidenberg and his team are based.
Identifying key technology themes is crucial, the manager says. In addition to artificial intelligence – Nvidia is the trust’s largest holding – Seidenberg is excited about the growth in cybersecurity. “It’s a critical part of the drive towards a world that rapidly embraces digitalisation,” he adds.
One of the fund’s key holdings is CyberArk, a US-listed company that helps large companies defend themselves against cyberattacks from fraudsters or hostile criminal organisations.
The company recently reported healthy quarterly results, with revenue up 37 percent year-over-year, and its stock price is up more than 18 percent this year.
“It’s developed a system that allows companies to protect data from cyberattacks, malware and hacking threats,” Seidenberg says. “From an investment perspective, it’s working in a technology area that will be around long after I’m done as a fund manager.
‘CyberArk is also not a mainstream tech stock. Its market cap of $10.9 billion (£8.5 billion) is a fraction of that of Nvidia ($2.6 trillion), so it’s off the radar of many investors.’
Seidenberg is also fascinated by the proliferation of semiconductors in our daily lives. Monolithic Power Systems, a leading semiconductor company, is a top 10 holding. “It’s one of the first companies I bought when I took over management of the trust in the summer of 2022,” says Seidenberg. “It was founded in 1997 by engineer Michael Hsing, and he’s still running the show.
“From an investor’s perspective, I like founder-run companies. Monolithic is the kind of company that the trust can own for multiple years.”
Another attractive theme is the ‘cloud’ – all things that are accessible via the internet. A major holding in this area is cloud monitoring specialist Datadog. Although the share price has been sideways this year, Seidenberg is confident that the company’s revenues – up 27 percent on last year – will continue to grow.
Over the past year, the fund has delivered an attractive return of 35 percent. However, it invests in a sector where sentiment can change abruptly: the fund’s three-year figures are worse than those of the past year.
For broad exposure to technology it is a good option. Annual management fees are a competitive 0.7 per cent with the potential to decline in percentage terms as the trust’s assets increase in value. The exchange identification code is BNG2M15 and ticker ATT.
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